Including future generations in flood protection decision-making
For investments in flood risk management we mostly look at costs and benefits during the life cycle of a measure. But what happens beyond that? New research by Deltares and Vrije Universiteit Amsterdam shows that those longer horizons and consequences for future generations can considerably change the outcomes.
In a paper published in Climate Risk Management, the costs of having to switch adaptation strategies have been quantified for the first time for a real-word case study. These switching costs can be considerable in some future scenarios and can even exceed initial investment costs.
Case study: a climate dike in Den Helder
The researchers analysed a plan for a climate dike in the Dijkkwartier area of Den Helder (in The Netherlands). This involves a wide, robust dike, on top of which housing can be build. The dike has been designed to withstand sea-level rise of up to 3.5 meters and can later be adapted to cope with 5.0 meters. This multifunctional solution combines flood protection with housing construction and spatial quality.
However, this combination also comes with potential risks. If the sea-level rises more than expected, houses might have to be removed and a different adaptation measure would have to be implemented.
In the research, this adaptation option was compared to conventional dike reinforcement, which involves incremental dike heightening and where housing construction can only occur behind the dike, not on top of it. For the incremental option, no switching costs would occur.
Switching costs can make a difference
If sea-level rise remains modest, the climate dike will have considerably more benefits than incremental dike reinforcement. This is mostly driven by spatial quality improvements and income generated from additional housing. With higher sea-level rise beyond the design standards of the climate dyke, the switching costs can be profound.
Costs will involve the demolition of housing, compensation for residents, planning costs, and adjustment of the dike. In extreme scenario’s, these costs can exceed the initial investments severalfold.
Although the level of sea-level rise at which this switch would be needed is likely still a long way off, the switching costs nonetheless affect the economic evaluation. For less robust adaptation measures in particular, the switching costs can be decisive in the adaptation strategy choice.
“We show that choices that seem straightforward today, may be very expensive tomorrow. By accounting for switching costs, you arrive at a fairer picture of what introducing a measure will mean for future generations,” says first author Anoek van Tilburg (Deltares / VU).
We show that choices that seem straightforward today, may be very expensive tomorrow.
Anoek van Tilburg (Deltares / VU)
Wellbeing of future generations at the forefront
An important component of the research is the explicit consideration of the wellbeing of future generations. The researchers did this in multiple ways:
- Costs and benefits are disaggregated by generation
- Long time horizons of up to 275 years
- Several methods for valuing future costs and benefits were employed
This shows that the chosen method strongly influences the weight that is assigned to future effects. With higher weights on the future, the switching costs become more important and may change which measure comes out as most desirable.
Moreover, by showing the results per generation we illustrate that the climate dike measure is not equally favorable for every generations, depending on socioeconomic developments: when population declines in Den Helder, the costs of the climate dike will exceed the benefits for multiple future generations.
Providing insights for adaptation decision-making
The study shows that economic evaluations should look beyond just short-term effects. This does not mean that a climate dike is not an attractive climate adaptation measure: de preferred choice depends on the weights assigned to the wellbeing of future generations.
Explicitly accounting for switching costs and generation-specific effects makes evaluations more transparent and provides a more realistic picture of the consequences of different choices. The methode aligns well with an adaptation approach like Dynamic Adaptive Policy Pathways (DAPP), which supports the stepwise development of robust measures for an uncertain future.
Part of an European project
The research is part of the PhD research of Anoek van Tilburg, which focuses on the explicit consideration of distributional effects in economic appraisals.
The research has been conducted as part of the ACCREU-project, a European research project focused on improving economic assessments of climate change and climate adaptations. In the project, Deltares collaborates with Vrije Universiteit Amsterdam.
Policy relevance
The key message from the researchers is that investments made today in flood protection also affect opportunities available to future generations.
By explicitly accounting for these effects, policymakers can make better-informed and more flexible decisions and avoid the need for costly course corrections in the future.